10 Top NASDAQ Penny Stocks Under $5

Penny StocksAre There Any Tech Penny Stocks Under $5?

If bull markets are “the rising tide that lifts all boats,” why are there NASDAQ penny stocks under $5.00? Shouldn’t they have swelled past that level by now? After all, the NASDAQ was in a bull market for the last five years (with the exception of Q3 and Q4 of 2015). So why can we still find cheap tech stocks for less than $5.00?

There are five possibilities:

  1. The stock has too many shares. If, for example, Intel Corporation (NASDAQ:INTC) holds a 10-for-1 stock split, INTC stock would drop from $36.82 to $3.68. Why? Because there are 10 times more shares. So, naturally that means the price would be divided by 10, but it doesn’t mean that Intel’s real value is diminished in any way.
  2. The stock IPO price was really low. A young company that understands optics might go public at a lower price…perhaps even under $5.00. This sets the bar low, allowing it to beat expectations in the short run.
  3. Investors think the stock is “stale.” Sometimes good companies get walloped because investors are convinced the stock has peaked. This perception can push a valuable stock into the bargain bin. It’s not fair, but it happens.
  4. Investors don’t think the stock is battle-tested. It’s not enough for a stock to have promise; investors also want a certain amount of resilience. Unfortunately, resilience can only be proven through experience, and experience takes time. So, perhaps all that these stocks need is time.
  5. The stock is just…bad. Of course, there’s always the possibility that the stock is trading below $5.00 because it’s representing a bad company. This is obviously the worst option, but things could turn around. See Apple Inc. (NASDAQ:AAPL), for example.

Any of these factors can suppress prices. But what you might not appreciate is that cheap tech stocks offer triple-digit upside if you buy them at the right time. For instance, I have identified 10 stocks that more than doubled since the start of 2017.

All of them are penny stocks in the technology sector. All of them are less than $5.00 a share. And all of them have returned extraordinary gains in the last few months. Take a look.

Top 10 NASDAQ Stocks — Year-To-Date Performance

Symbol Company Share Price YTD Return
PULM Pulmatrix Inc $2.88 388%
CGIX Cancer Genetics Inc $4.00 196%
GALT Galectin Therapeutics Inc $2.84 190%
PME Pingtan Marine Enterprise Ltd $4.43 155%
PIRS Pieris Pharmaceuticals Inc $3.56 153%
WCST Wecast Network Inc $2.99 143%
INAP Internap Corp $3.38 119%
HPJ Highpower International Inc $4.95 111%
IMGN ImmunoGen, Inc. $4.17 104%
SAUC Diversified Restaurant Holdings, Inc $2.83 102%

Investors could have doubled their wealth by investing in these penny stocks. The proof is in the pudding. An initial investment of $10,000 at the start of the year would have added an extra $10,000 to an investor’s wallet.

And that’s after only a handful of months!

NASDAQ Penny Stocks List 2017

I know some investors will let this information sail right over their heads. But take a minute to think about it. You remember New Year’s Eve, right? It was just a few months ago. I’m betting not much has changed in your life since then, unlike for anyone who invested in these stocks.

1. Pulmatrix Inc

Biotech is one of the hottest parts of the stock market. There are dozens of winners coming out of this space, not all of them expensive. Pulmatrix Inc (NASDAQ:PULM), for example, is trading at a very affordable price. This pharma company has a lot of life-saving drugs in its pipeline, which is perhaps why PULM stock jumped 388% since the start of the year.

PULM stock chart

Chart courtesy of StockCharts.com

2. Cancer Genetics Inc

Despite widespread advances in smartphone technology, we haven’t cracked the code on real problems in society, like cancer, for instance. Cancer is still one of the hardest diseases to deal with, yet our technology doesn’t seem to be getting better at addressing it. Cancer Genetics Inc (NASDAQ:CGIX) is trying to change that, with precision medicines in the field of oncology and other cancer-related areas. Obviously, there is huge potential in such an ambitious company, which the share price is starting to bear out.

CGIX stock chart

Chart courtesy of StockCharts.com

3. Galectin Therapeutics Inc

Didn’t I tell you that biotech is a hot sector? Galectin Therapeutics Inc (NASDAQ:GALT) is third on my list of NASDAQ penny stocks—in terms of year-to-date (YTD) performance—and it’s also the third biotech stock on the list. Are you noticing a pattern? Investors who put money into this firm at the start of the year would have been sitting on triple-digit returns by now.

GALT stock chart

Chart courtesy of StockCharts.com

4. Pingtan Marine Enterprise Ltd

Pingtan Marine Enterprise Ltd (NASDAQ:PME) is just about as far away from biotech as you can imagine. It is a U.S.-listed fishing company based out of China. The company’s ships can be found in the Arafura Sea and the Indian Exclusive Economic Zone, both areas that are available for ocean fishing. PME stock has had a stellar year so far. For a clue on whether this trend will continue, investors should be looking ahead to the company’s next earnings announcement on May 16.

PME stock chart

Chart courtesy of StockCharts.com

5. Pieris Pharmaceuticals Inc

Okay, one non-tech stock was enough of a break. Back to biotech. Pieris Pharmaceuticals Inc (NASDAQ:PIRS) has a slate of opportunities in immunology-related products, which is to say the stock has tremendous upside. Pieris has ties to major biotech firms like AstraZeneca, Servier, and Sanofi, so it’s not like the company is drifting in the wind. Considering the 153% YTD performance, I wouldn’t want to be on the short side of this bet.

PIRS stock chart

Chart courtesy of StockCharts.com

6. Wecast Network Inc

Wecast Network Inc (NASDAQ:WCST) is a Chinese conglomerate that’s ostensibly a media company. However, it encompasses a full range of weird businesses, from selling scooters to newspapers. That said, the stock is doing exceptionally well this year, particularly on rumors of a merger. Considering that the potential partner is owned by the chair of Wecast, and that this deal would happen in the monopoly-lovin’ land called China, we should be seeing this stock continue its skyward trek.

WCST stock chart

Chart courtesy of StockCharts.com

7. Internap Corp

Of all the penny stocks in the technology sector, Internap Corp (NASDAQ:INAP) is probably the least headline-worthy. It’s in the business of Internet infrastructure, which is a great business, but it’s not…well, sexy. No one wants to read about a company that sells colocation services for data centers; they want to hear about driverless cars and virtual reality (VR). But that hasn’t stopped INAP stock from racking up big gains this year, so the company should just keep doing what it’s doing right now.

INAP stock chart

Chart courtesy of StockCharts.com

8. Highpower International Inc

As a maker of industrial batteries, Highpower International Inc (NASDAQ:HPJ) should write Elon Musk a thank-you note. The Tesla Inc billionaire CEO has elevated the entire battery industry by building his giant “Gigafactory” in the Nevada desert. It garnered tons of media coverage (some of it from this publication), and it is driving a massive overhaul in energy storage. Highpower could, and indeed has been, benefiting from this trend.

HPJ stock chart

Chart courtesy of StockCharts.com

9. ImmunoGen, Inc.

Yes, ImmunoGen, Inc. (NASDAQ:IMGN) is another biotech stock. It partners with leading firms like Amgen, Inc., Roche Holding Ltd., and Novartis AG to provide novel treatments for cancer patients, which is a story that might sound familiar by now.

But what can I say? Biotech companies simply have the best-performing NASDAQ penny stocks. It’s not like my list of “penny stocks 2017” was drawn up by clairvoyance; it was drawn up by data. So, even if you don’t trust my intuition, trust the numbers.

IMGN stock chart

Chart courtesy of StockCharts.com

10. Diversified Restaurant Holdings, Inc

Have you ever eaten at a Buffalo Wild Wings restaurant? Well, then you’ve contributed to the earnings beast that is Diversified Restaurant Holdings, Inc (NASDAQ:SAUC). This stock may be the last on my list of cheap tech stocks, but has still doubled in value this year. If that’s impressive for a technology company, it’s nearly impossible for a restaurant company. While not strictly a technology company, SAUC stock is listed on the NASDAQ stock exchange.

SAUC stock chart

Chart courtesy of StockCharts.com

There Are Still Tech Penny Stocks Worth Looking At

Here’s the bottom line: If you completely ignored NASDAQ penny stocks at the start of the year, you missed out on monster-sized returns.

There were many more stocks under $5.00 that skyrocketed, but I narrowed my list to companies valued over $50.0 million, and I still came up with 10 winners. That’s how easy it is to find triple-digit gainers in the bargain bin.

So, if you’re only comfortable with the most “popular” stocks, like TSLA, AMZN, and FB, just know that you’re forfeiting huge returns.